The Gift of Bitcoin: Chapter 1 – Introduction to Bitcoin

This is the first chapter of “The Gift of Bitcoin” – a world class bitcoin education sent to recipients of bitcoin gifts sent with GiveBitcoin.

Congratulations on receiving your GiveBitcoin gift! Someone who cares about you gifted you some Bitcoin (BTC) and it’s our job to help you learn about it.

Quick summary:

Is my Bitcoin safe? Your Bitcoin is safe and sound. It’s currently stored with a licensed, regulated and insured custodian. Custodians are kind of like banks.

When can I access it? Your Bitcoin is currently escrowed so you won’t be able to move it until the holding period is complete (typically 1 year). This ensures your bitcoin is secure while you have time to learn about it.

How do I learn more? While you wait to access your gift, it’s our job to teach you about Bitcoin. Each month we’ll send you a new chapter of “The Gift of Bitcoin” which is an e-book (with audio version included) created with some of the best known Bitcoin educators.

In this first lesson, you’ll learn some differences between Bitcoin and Dollars, explore price volatility, and how to approach Bitcoin as an investment. We’ll also share what you can expect in the coming months and introduce some additional resources if you’re hungry to learn 🙂

Chapter 1: Introduction to Bitcoin

Someone just sent you Bitcoin as a gift. Congrats! We’re here to explain it all.

Okay, I like gifts. And I’ve heard of Bitcoin. But if I’m being honest, I’m not sure I really get it. It’s like digital money?

Yes, but it’s so much more than that. Bitcoin is a revolution in how money works, creating the best money we’ve ever known. It’s digital gold, but even better. We’ll show you why via this guide.

Define: Bitcoin

Bitcoin is a new form of money for the Internet era, which frees us from the control of greedy banks and corrupt governments. Anyone can send and receive Bitcoin anywhere on the globe with nothing more than a digital phone, without asking for permission or giving up their identity.

Source: BTCS

Sounds nice, but cash is a gift I understand already. Why not just give me that?

Your gifter chose to give you Bitcoin rather than old-school cash (also known as fiat money) because they want to turn you on to the Bitcoin revolution. Bitcoin is going to have a major impact on how people think about money and has the potential to significantly improve the world in all kinds of ways. That may sound grandiose but as you learn more about Bitcoin, you’ll see its amazing potential.

Define: Fiat currency

Fiat currency is decreed to be money by the government but is not backed by any physical commodity, such as gold. The U.S. dollar is fiat money, as are the euro and all other national currencies.

Sounds nice. I can’t wait to start spending my gift!

Hold your horses. You can’t spend your gift right away since it’s escrowed. Think of it like a trust fund or a C.D. at a bank. It’s going to sit there for a while before you can access it. In the meanwhile, you’ll get to learn all about Bitcoin, the evolution of money, and what’s at stake here.

Who’s holding my Bitcoin? How do I know it’s going to be there once the escrow is up?

Your Bitcoin is secured, insured, and stored in an account in your name at Prime Trust, a highly reputable custodian used by many major businesses. It’s your account and you’ll be able to view it during the holding period. As soon as your holding period is up, you can withdraw your Bitcoin to any Bitcoin address or leave it there.

So once the escrow is up, I can spend my Bitcoin?

You could. But we want to convince you to HODL (i.e. hold it instead of trade it). Our belief is the value of Bitcoin will grow in the future and if you sell now, you’ll miss out on greater gains in the future.

Define: HODL

The term “HODL” is a misspelling of “hold” from a 2013 Bitcointalk forum post that became a meme. The core concept of what HODL has come to mean is “crypto is volatile, but the long term trajectory has been up, thus if you hold through the volatility you [hopefully] will be rewarded at some future date; so, don’t panic sell!” (source)

What’s the point of having money if I never get to spend it?

We’re not saying you should never spend it. If Bitcoin goes up 100x and you eventually want to sell some to buy a house or another tentpole purchase, go for it. But we encourage you to leave the rest of it in Bitcoin, because if, as projected, billions of people move to store meaningful value in the soundest, hardest money that’s ever existed, your gift will go up significantly in value.

So saving money at my bank the way I do now is a bad idea?

You can continue using your “regular” bank; plenty of other people certainly will. But in a few years, the current banking system will seem archaic, like using a fax machine in the age of email. “The bank is closed during certain hours?” “It takes a week to transfer funds to a different country?” Those sorts of issues will seem ridiculous when compared to the freedom that Bitcoin allows.

“My vision for Bitcoin is very long. I’m thinking about it as something for my grandkids.” –Yan Pritzker, GiveBitcoin Cofounder and CTO and author of Inventing Bitcoin

And just what is GiveBitcoin exactly?

Our service helps people gift Bitcoins to friends and family quickly and easily, escrowing their gifts so recipients become hodlers right out of the gate. We bundle the gift with top notch guides to turn recipients into “real” Bitcoiners by the time it unlocks. We know Bitcoin can be intimidating to beginners so our aim is to guide you into the fold in an easy-to-process, stimulating way that helps you get it.

Can I just skip the curriculum?

You shouldn’t. This gift is an opportunity. By learning all about Bitcoin, you’ll be on the front lines of a revolution. Hopefully you’ll get hooked, fall into the rabbit hole, and immerse yourself in the topic and eventually become an evangelist. (It happens a lot!)

“Here’s a typical path for how people start going down the Bitcoin rabbit hole: At first they get in as a bit of a gamble. Eventually, they start learning a bit more about Bitcoin and then they start learning about the technology, security, Austrian economics, etc.”–Stephan Livera, GiveBitcoin advisor and Bitcoin podcast host

Source: Anonymous

Look, I’ll be honest. When it comes to money, I’m greedy. Is this going to make me rich or what?

We can’t promise that. However, the price of Bitcoin has radically increased over the past decade. As of the time of publishing, Bitcoin has been profitable to hold for 94 percent of its existence.

Should I pay attention to the ups and downs of Bitcoin’s value?

While it’s fun (and somewhat addictive) to pay a lot of attention to the price of Bitcoin, the more important thing is to truly understand it. Our recommendation: Feel free to check in on the value of it now and again, but don’t get too caught up in its daily fluctuations.

But I’ve heard Bitcoin is a risky investment. Should I be worried?

First of all, this is a gift so there’s no real risk here; you didn’t have this money before so it’s, as they say, all gravy. That said, a little bit of Bitcoin in your portfolio is a good idea, if past performance is any indication. The addition of a volatile asset to a fairly steady portfolio has a lot of benefits; you’re still managing your risk but you’re getting exposure to a potentially huge reward. And the younger you are, the more it makes sense to incorporate a little bit of risk into your portfolio.

“It’s like angel investing. Put 1% of your liquid net worth into this asset and it might go to zero, in which case you have 99% of your money, but it also might 100x, in which case you doubled your money. So, that’s a good way to think about it. For the last 10 years, that’s been a much better portfolio than going all in on, say, stocks and bonds.” -Cory Klippsten, GiveBitcoin Founder

So what happens next?

We’re going to send you emails on a regular basis to help educate you about Bitcoin. And you can visit our website and start learning at your own pace; there are tons of books, podcasts, and other resources that can help. When your escrow is up, we’ll help you figure out what to do next. You can also request more Bitcoin at any time via GiveBitcoin. And feel free to ask us questions along the way. We’d love to hear from you.

What else will I be learning?

You’ll get a thorough guide on Bitcoin. You’ll learn why it was set up and designed the way it is and important concepts around free market money, sound money, the power of currency that nobody controls, and lots more. Don’t worry if that sounds complex; we’ll make it all easy to understand.

“Once it sort of clicks for a person, then at that point they just start reading and listening to everything they can. Because they start realizing the importance of this, and then they start listening to every podcast that they can, or watching every YouTube, or listening.” –Stephan Livera, GiveBitcoin advisor and Bitcoin podcast host

Is it going to get really technical?

One nice thing about your gift is that, since it’s escrowed, you don’t have to start with the nitty gritty technical details that intimidate many Bitcoin newcomers. Most people new to Bitcoin are immediately thrown into complex topics like how to store Bitcoin safely, private and public keys, seeds, wallets, backups, privacy, nodes, security, and more. It can be a lot to take in all at once. You’ll get to take the “scenic route” before having to learn about all that. And who knows? Perhaps by the time your gift unlocks there will be simpler solutions and an easier onboarding flow to Bitcoin than what exists now.

What should I do now?

You can hang tight for now. Make sure to add our email to your contact list so you see future emails from GiveBitcoin. We’ll be sending you more chapters of this guide soon, about once a month. If you want to do some additional research, here are some great links to get started.

Feel free to skip ahead by checking out the curriculum at our site. We’ll also offer related links that are great resources for digging deeper. Here are a few: